Down syndrome (DS), a disorder that affects approximately 1 in 700 live births across all ethnic groups, is the leading genetic cause of mental retardation. Other clinical abnormalities associated with DS include congenital heart disease, hypotonia, facial dismorphology, immune system defects, gastrointestinal anomalies, and the early development of the pathological and neurochemical changes of Alzheimer?s disease. Although it has been known for quite sometime that DS is due to the presence of an extra copy of genes located on chromosome 21, the exact genes responsible for the different phenotypes seen in DS patients, particularly mental retardation, remain unknown. DSCR1 (Down Syndrome Critical Region 1), located on chromosome 21, is overexpressed in the brain of Down syndrome fetus and encodes an inhibitor of calcineurin, but its physiological significance is unknown. The Drosophila nebula protein shares 43% identity and 64% similarity in amino acid sequence with exon 1 of human DSCR1. In order to study its functional importance, we generated Drosophila loss-of-function and overexpression mutants of nebula, an ortholog of human DSCR1. We showed that nebula loss-of-function mutants exhibit defective learning and long-term memory that are accompanied by perturbations in calcineurin mediated-signaling. Transgenic flies overexpressing nebula also show severely impaired learning. Intriguingly, transient overexpression of nebula in adult flies is sufficient to cause defective learning, whereas restricted overexpression during development did not alter learning in adult flies. By using Drosophila as a model, we showed several important novel findings. We first demonstrated that nebula is required for effective learning and memory. Second, we showed that flies overexpressing nebula at a level comparable to that seen in DS brain tissues recapitulated a major phenotype of DS ? mental retardation/learning defects. Third, we were able to apply the information learned from the nebula mutants directly to DS fetal tissues and show that calcineurin signaling pathway is altered. Our results provide the first demonstration of the possible link between altered calcineurin signaling and mental retardation in Down syndrome and offer an evidence for the gene dosage hypothesis as the cause of the phenotypes in DS. In addition, we show that the same calcineurin-mediated signaling pathway is altered in human trisomy 21 fetal brain tissue overexpressing DSCR1. Together, these results suggest that DSCR1 mediates learning and long-term memory, and that alteration of DSCR1 expression and the subsequent disturbance in calcineurin-mediated signaling could be one cause of mental retardation in Down syndrome. With its amenability to genetic manipulations and behavioral assays, Drosophila can be a powerful model system for studying the mechanisms underlying some of the phenotypes in DS, especially mental retardation. The DS region in human chromosome 21 contains approximately 50-100 genes, and either grouped or individual overexpression of these genes in Drosophila may further elucidate the link between different genes and phenotypes seen in DS. In addition, the inducible UAS/GeneSwitch system in Drosophila offers the advantage of specific spatial and temporal control of the transgene expression, and may thus allow researchers to differentiate developmental defects from molecular/biochemical defects. Moreover, Drosophila may be used as a tool to rapidly screen for pharmacological agents that improve learning and memory deficits. Screens for drugs that restore the balance of kinases and phosphatases, as well as genetic screens to identify suppressors or enhancers of nebula in the learning and memory pathway will not only provide insights into the underlying mechanism of mental retardation in Down syndrome, but may also suggest potential means to treat or ameliorate learning and memory deficits.